By: Patrick Corrigan
When it comes to financial success, the luxury of time simply can’t be replaced by any other meaningful factor within our control. Yet, the concept of time and making the most of it applies to several other functions of life such as fitness, family, friends, and fun. Including “finance,” I like to think of these as the big five “Fs” of life because the time allotted to each “F” defines the quality of our lives. In other words, these “F’ing” factors are important to everyone.
Considering time as it relates to finance: this is the nerdy math equation for how a dollar invested today grows to be worth several dollars over time.
FV = PV (1 + r)n
FV is the future value of the investment and PV is the current value of the investment. R is the rate of return your investment earns and N is the time you have available for the investment to mature. Remembering back to our elementary math classes, when something is raised to the power, it compounds exponentially, not linearly. This makes all the difference.
Sparing you the gory graphs and charts, go to any online investment calculator, and while holding the other two constant, play around with different values for each of the inputs.. You will see the value of N has the most meaningful impact on the amount that accumulates. Time is money.
Now take a breath and forget the idea of investing for your financial success...instead, think about the value of time as it relates to all the other parts of our “F'ing” lives.
Fitness – when has a yo-yo diet or intense exercise right before a big event ever had a positive impact on your long-term health goals? We all know it would be better if we focused our fitness goals by doing a few positive things for ourselves each day, each week, each month. Doing this is what ensures we always feel our best.
Family & Friends – how often do we tell ourselves we will make time to catch up with family and friends once our world slows down and we have some quality time available to share with them? If you are like me, the world never seems to give you this time. We must be intentional about making time for others and not expect the universe to provide us with a window of opportune time. There is no time like the present.
Fun – we are collectively terrible at carving out time for ourselves to enjoy life and celebrate the journey and not the destination. This really isn’t that surprising given the U.S. tends to be a monochronic culture (i.e. a linear approach of doing one thing at a time) and not a polychronic culture where fun is mixed into the natural rhythms of life. We tend to work hard so we can play hard... seems like we should try to find fun in everything we spend our time doing and not only reward ourselves with fun when the time is “right”.
We are a financial firm, so it probably feels like we are best qualified to help you with the financial timing of life, but if you ask anyone who works at WCF what our mission is, it is to help clients live a full and healthy life in which they feel they have time for the all the important F’ing things.